Financial Performance Overview

For Q2FY27, the company reported a revenue of ₹225 crores, representing a 55% year-on-year (YoY) growth. EBITDA stood at ₹29 crores, a 3.5% YoY increase, resulting in an EBITDA margin of 13%. Profit After Tax (PAT) was ₹16 crores with a PAT margin of 7.3%, which is lower by 12% YoY.

Segmental Performance (Gross Value Merchandise)

The growth was broad-based across all business segments:

  • Retail: Grew 72% YoY to ₹148 crores. The key driver.
  • Wholesale: Grew 31% YoY.
  • Job Work: Stood at approximately ₹3.3 crores, growing 19% YoY.

Segmental Performance (Volume)

The total volume sold was 363.58 kgs, broken down as:

  • Retail: 96 kg
  • Wholesale: 47 kg
  • Job Work: 219 kg

Factors Impacting Margins and Profitability

The management cited several reasons for the margin compression and lower PAT growth despite strong revenue:

  • Finance Cost: Increased significantly from ₹2.55 crores in the previous period to ₹5.54 crores. This was attributed to inventory build-up for the new Surat store, leading to higher carrying costs.
  • Depreciation: Increased approximately 2.5x-3x from ₹86 lakhs to ₹1.7 crores.
  • One-time Expenses: Promotion and marketing expenses for the new store launch increased by ₹5-6 crores.
  • Gross Margin Pressure: Was lower due to a higher proportion of bullion sales (with zero margin) used to pay vendors and a lack of significant inventory gain as gold prices depreciated during the quarter.

Operational and Strategic Highlights

  • New Store Opening: A new large-format retail store under the brand 'Harit Zaveri Jewellers' was inaugurated in Surat at the end of September 2026. The inauguration was done in partnership with actor Vicky Kaushal.
  • Store Performance: The Surat store has averaged sales of approximately ₹50 lakh per day since its opening.
  • Expansion Strategy: The company's strategy is focused on disciplined retail expansion within Gujarat. The plan is to open 3-4 stores every year. The immediate pipeline includes:
  • Rajkot store: Planned launch between 21st-25th November 2026.
  • Maninagar (Ahmedabad) store: Planned for December 2026.
  • Gandhinagar store: Planned for January 2027.
  • Marketing Budget: An ongoing marketing budget of ₹20-25 crores is planned for the year to support new store launches and brand building.
  • Gold Metal Loan (GML): Current GML exposure is ₹14-15 crores (approx. 14-15 kg). Management has a clear target to increase this to 100 kg (approx. ₹100-150 crores) within the next 6-9 months (by Q1FY28). The objective is to hedge inventory and reduce interest costs, as GML rates (~3.5-4%) are significantly lower than cash credit rates (~9%).
  • Long-term Vision: The goal is to build 'Harit Zaveri Jewellers' into a leading zonal brand in Gujarat and potentially beyond, known for design, craftsmanship, and transparency.

Outlook and Guidance

  • The company expects to sustain consolidated EBITDA margins of 11-12% in the long term.
  • The B2B (Wholesale and Job Work) business is expected to remain stable, while the primary growth kicker will come from the B2C (Retail) expansion.
  • For new large-format stores, the company expects inventory turns to be around 1-1.2 in the first year, maturing to 2-2.5 turns over three years. The gross margin for retail is expected to be in the range of 14-16%.